Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
25 Cards in this Set
- Front
- Back
|
Book Value |
It is the stated value from the firm's Balance Sheet. |
|
|
Coupon interest rate |
The stated annual interest rate on the bond. It is usually fixed for the life of the bond |
|
|
Current yield |
The coupon interest payment divided by the current market price of the bond. |
|
|
Face amount |
The Maturity Value of the bond |
|
|
Indenture |
The contract that accompanies a bond and specifies the terms of the loan agreement. It includes management restrictions, called covenants. |
|
|
Intrinsic Value |
Present value of the assets expected cash flow |
|
|
Market rate |
The interest rate currently in effect in the market for securities of similar risk and maturity. The market rate is used to value bonds. |
|
|
Market value |
The price for the asset at any given time-determined by supply and demand in the marketplace. Assets can be bought or sold at this price. |
|
|
Maturity |
The number of years or periods until the bond matures and the holder is paid the face amount |
|
|
Par value |
The same as face amount, the maturity value of the bond. |
|
|
Yield to maturity |
The yield an investor will eam if the bond is purchased at the current market price and held until maturity. |
|
|
derivative |
a financial security with a value that is reliant upon or derived from an underlying asset or group of assets-a benchmark. |
|
|
Financial Derivatives |
are so effective in reducing risk because they enable financial institutions to hedge, that is, engage in a financial transaction that reduces or eliminates risk. |
|
|
Forward Market |
Forward contracts are agreements by two parties to engage in a financial transaction at a future (forward) point in time. |
|
|
swap |
are financial contracts that obligate each party to the contract to exchange (swap) a set of payments it owns for another set of payments owned by the other party. |
|
|
Currency swap |
involve the exchange of a set of payments in one currency for a set of payments in another currency. |
|
|
Interest rate swap |
involve the exchange of one set of interest payments for another set of interest payments, all denominated in the same currency |
|
|
Mutual funds |
pool the resources of many small investors by selling those shares in the fund and using the proceeds to buy securities. |
|
|
Convenience |
Over the internet, you can easily invest in various mutual funds that match your financial goal-whether it's for retirement, your child's education fund, or any Investment objective |
|
|
Ability to invest without blowing your budget |
Typically, mutual funds in the Philippines require at least a PHP 5,000 initial investment and succeeding investments of at levest PHP 1,000 |
|
|
Professional money management |
mutual funds investors benefit from the expertise and full-time service of professional fund managers who make investment strategies and decisions on their behalf |
|
|
High liquidity |
Mutual funds are highly liquid investments, meaning you can buy or sell your shares immediately, usually within a business day, |
|
|
High Diversification |
With mutual funds, your money is invested in a broad variety of assets. Through this diversification, you minimize the risk of losing your investments. |
|
|
Safe Way to Invest |
mutual funds companies in the Philippines are regulated by the SEC, they're required to comply with the Investment Company Act (Republic Act 2629). |
|
|
Bond Funds |
Low to moderate-risk investors who want to protect their savings against inflation |
